Harley-Davidson moving some production overseas after retaliatory tariffs

Logo of U.S. motorcycle company Harley Davidson

However, Harley-Davidson has warned consistently against tariffs, saying they would hurt sales.

Aram... The Trump administration's duties on European goods led to these retaliatory tariffs... and it seems to be backfiring on American companies...

Europe implemented tariffs on the imports of United States goods, including motorbikes and bourbon, in response to Donald Trump's tariffs on steel and aluminium.

Mr Trump was particularly heartbroken over Harley-Davidson because he held it up as an example of a firm he could help by bringing down trade barriers. Besides its United States plants, Harley-Davidson maintains manufacturing facilities in Australia, Brazil, India and Thailand, according to its website.

Later that day Trump said the company was waving the "white flag" and surrendering after he had praised the company numerous times and invited its executives to the White House.

President Trump's trade war has started to bite American businesses in earnest.

In 2017, Harley sold almost 40,000 new motorcycles in Europe, which accounted for more than 16 per cent of the company's sales a year ago.

In the case of Europe, the president has blasted trade imbalances with European Union nations such as Germany. Now he is expected to restrict technologies sold to China, and Chinese investment in USA companies.

"To address the substantial cost of this tariff burden long-term, Harley-Davidson will be implementing a plan to shift production of motorcycles for European Union destinations from the U.S.to its global facilities to avoid the tariff burden".

In the filing, Harley Davidson says they made a decision to move production because the cost increase "would have an immediate and lasting detrimental impact to its business in the region". So, since Harley will have a seriously hard time absorbing that cost in its second biggest world market, company bigwigs chose to increase production overseas.

"In the near-term, the company will bear the significant impact resulting from these tariffs, and it estimates the incremental cost for the remainder of 2018 to be approximately $30 to $45m", it continued.

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Mid-Continent Nail of Poplar Bluff, Missouri, the largest US nail manufacturer, cut 60 jobs on June 15 and plans to lay off an additional 200 workers in a few days, citing plummeting sales following the imposition of Trump's tariffs on metals. It wasn't immediately known whether any other facilities would be consolidated.

The International Association of Machinists and Aerospace Workers (IAM), the union that represents Harley employees in three USA plants, said the offshore move had been planned long in advance.

Harley-Davidson announced its intentions in regulatory filings posted to the company's website on Monday, June 25.

Those jobs won't be moving overseas. Martinez added. "Does Harley even understand what "Made in America" means?"

Harley's announcement came as administration officials struggled to present a united front on another element of Trump's trade policy, new measures created to curb China's ability to access American technology by investing in American companies.

Trump has regularly pointed to Harley-Davidson as an example of a USA business harmed by trade barriers. "The company has already cut 60 employees from its workforce of 500, and it will likely soon lay off 200 more".

The EU's retaliation to Trump's steel and aluminum levies will cost about US$2200 per motorcycle shipped to Harley's second-biggest market in the world, the company estimated in a filing on Monday. In a piece by the Washington Post, the Mid-Continental nail, one of the country's largest manufacturers of nails, say they will be laying off approximately 60 employees as a direct result of the European Union tariffs set forth by the Trump administration.

The company is not raising bike prices for customers or retailers.

Wisconsin's elected leaders said the decision pointed to the need to expand markets.

"This is further proof of the harm from unilateral tariffs", a spokesperson for Ryan said in a statement.

Fellow Republican Gov. Scott Walker is echoing those comments.

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